- LONDON (Reuters) - Gold fired
to its highest price in nearly six years on Wednesday as fears of a war
in Iraq sent investors scurrying for a safe haven for their money.
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- Spot gold traded at $360.25 an ounce, its highest since
March 1997 and up from New York's last quoted $357.10/357.60 on Tuesday.
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- Investment uncertainty, now heightened by fresh weakness
in the dollar in currency markets and more losses on Wall Street on Tuesday,
traditionally favors gold.
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- Jitters in precious metals markets also sent platinum,
widely used in jewelry, to its highest in 17 years.
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- Momentum for war appeared to be growing as President
Bush said on Tuesday that Baghdad was clearly not disarming and that time
was running out.
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- "Whilst geopolitical tension continues to rise it
is hard to make a case for a retreat in the gold price, especially if the
U.S. dollar continues to weaken," said John Reade, metals analyst
at UBS Warburg.
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- Gold also gained after the Russian news agency Interfax
reported that the Russian armed forces had obtained information that the
United States and its allies had already decided to launch military action
in Iraq from mid-February.
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- Gold's so-called war premium has helped boost bullion
by more than 25 percent from levels at this time last year, making the
metal one of the best-performing financial assets.
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- By 1511 GMT spot gold was quoted at $358.50/359.25.
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- Gold was set or "fixed" in the London afternoon
session at $358.50 an ounce, down from the morning fix of $359.25 which
was also its highest since March, 1997.
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- "We're going to $375. I'm quite convinced about
that," said Peter Hillyard, head of metals sales Europe at ANZ Investment
Bank, adding that a lack of bullion selling by central banks and producers
was key to gold's rally.
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- The dollar briefly fell to a three-year low against the
euro for a fifth successive day and approached four-year lows against the
Swiss franc, cowed by increasing talk of war.
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- "The market is not factoring in any significant
retracement in the euro and Bush's words are getting stronger...Gold is
still a good barometer of risk aversion," said Kevin Crisp, head of
commodities research at Dresdner Kleinwort Wasserstein.
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- PLATINUM AT 17-YEAR HIGH
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- Silver was quoted at $4.82/4.84 an ounce from $4.81/83
at the New York close on Tuesday, tracking gold's gains.
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- Platinum hit a near 17-year high, lifted by strong interest
in the metal from investment funds.
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- The metal was set or "fixed" in the London
morning session at $648.00 an ounce, its highest since September 1986,
according to Reuters data.
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- Talk of supply interruptions in the world's top producer
South Africa and number two Russia fueled the rally.
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- An accident and subsequent explosion in late December
has disrupted output at the Western Platinum smelter owned by Lonmin Plc,
the world's fourth largest producer.
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- Russian metals giant Norilsk Nickel is grappling to avert
a pay strike.
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- "Market participants are waiting for a news release
from Lonmin on Friday concerning its new production targets following the
explosion," Barclay's Capital analyst Ingrid Sternby said.
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- According to historical data from UK-based refiner Johnson
Matthey, platinum was fixed at a peak of $663.75 an ounce in early September
1986.
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- In 1980 the metal soared from $750 on January 2 to reach
$1,047.50 on March 5, before subsiding equally rapidly to $500-$600 in
April of that year.
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- Platinum was at $643.00/650.00 an ounce, up from $629.50/636.50
at the New York close and palladium was at $266.00/274.00 from $260.00/268.00.
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